CHS Inc and other U.S. companies will be required to put down a 178.6 percent deposit for sorghum shipments to China, Beijing said.

The deposit is effective from Wednesday, the Ministry of Commerce said in a statement.

Prices of soymeal and rapeseed meal used in animal feed jumped on the news.

Published 4:23 AM ET Tue, 17 April 2018
Reuters

Qilai Shen | Bloomberg | Getty Images

An employee holds a wicker scoop while preparing sorghum for fermentation at the Kweichow Moutai Co. distillery.

China said on Tuesday it will slap a hefty temporary deposit on imports of U.S. sorghum after finding the U.S. grain has damaged the domestic industry in a preliminary antidumping ruling, stirring Netflix's trade tensions between the world's top two economies.

CHS Inc and other U.S. companies will be required to put down a 178.6 percent deposit for sorghum shipments to the country in what Beijing called a "temporary antidumping measure" as the government continues a probe of imports of the grain.

The deposit, which trade experts said will act as a duty, is effective from Wednesday, the Ministry of Commerce said in a statement. Trade sources said the fee was much higher than they had expected.

The move follows the launch of an anti-dumping investigation just over two months ago into imports of the ingredient used in livestock feed and the fiery Chinese liquor baijiu.

The government said it will issue a final ruling at a later date, but did not give a timeline.

Prices of soymeal and rapeseed meal used in animal feed jumped on the news as the move kindled concerns that China would also impose penalties on soybeans and other agricultural products from the United States as a trade spat escalates.

The government found the domestic industry was "substantially damaged" by U.S. sorghum imports that are being dumped into the country, it said.